Hepatic lipase hydrolyses triacylglycerol in chylomicrons and very low density lipoprotein remnants in the liver. We have shown that hepatic lipase is present extracellularly in liver from normal rats and newborn mutant mice with a combined lipase deficiency (cld\cld). Combined lipase deficiency in mice is characterized by marked functional deficiencies of both lipoprotein lipase and hepatic lipase. Hepatic lipase is present beneath the sinusoidal endothelial lining cells and hepatocyte basal surface in the "space of Disse". In cld/cld mice lipid particles the size of chylomicrons and VLDL are also present in the "space of Disse". Hepatic lipase in the extracellular space is associated with matrix material, collagen and lipid particles. It appears that the extracellular matrix is a repository for hepatic lipase as well as lipoprotein particles and probably the site of hepatic lipase hydrolytic activity in normal rats. In contrast, the extracellular hepatic lipase in liver of cld/cld mice is hydrolytically inactive. Cholesterol derived from endogenous biosynthesis and exogenous sources (LDL-cholesterol and non-lipoprotein cholesterol) translocates to the Golgi. Cholesterol also plays a role in targeting fluorescent ceramide (C6-NBD-Cer), a precursor of sphingolipid, to the Golgi. Cholesterol accumulates in both lysosomes and Golgi in cultured cells derived from Niemann-Pick type C patients. We found Golgi involvement in the pathogenesis of the Niemann-Pick type C lipid storage disease. Liver biopsies from NP-C patients contain massive accumulations of cholesterol and other lipids in both hepatocytes and sinusoidal cells. Enzyme and immunocytochemistry revealed that lipid accumulation in lysosomes and Golgi compartments in liver cells probably reflects defective intracellular transport of both endogenously and exogenously derived lipids. The Golgi plays a role in intracellular lipid transport and the NP-C lipid storage disorder may reflect a lesion in this Golgi function.